Shulou(Shulou.com)11/24 Report--

According to news in the morning of February 3, Beijing time, Apple today released its results for the first quarter of fiscal 2023.

According to the report, Apple's first-quarter net revenue was $117.154 billion, down 5% from $123.945 billion in the same period last year, the first year-on-year decline in revenue since 2019. It also recorded the biggest quarterly revenue decline since September 2016; net profit was $29.998 billion, down 13% from $34.63 billion in the same period last year. Of this total, revenue in Greater China was $23.905 billion, down 7 per cent from $25.783 billion in the same period last year. Apple's first-quarter revenue and earnings per share failed to meet Wall Street analysts' expectations, sending its shares down nearly 4% in after-hours trading.

After the announcement, Apple management held a conference call with CEO Tim Cook, chief financial officer Luca Maestri and Tejas Gala, senior director of investor relations, attending and answering analysts' questions.

The following is the main content of the question and answer session of the analyst in this conference call:

UBS analyst David Vogt: management mentioned that the supply chain has returned to normal after a very difficult October, November quarter, but we will still see a poor supply chain in terms of corporate and consumer technology products. How does the company view the current supply chain situation, inventory levels, and what areas need to be strengthened to avoid possible impact on the company? Has the company changed its mind? What is the impact on profit margins and cash flow?

Tim Cook: on the supply side, we did see the disruption from early November to almost the whole of December. From a supply chain point of view, the current situation can meet our needs, so this problem has been solved. For the future supply chain situation, Apple's products are produced all over the world, parts are supplied from many places, and iPhone's five assembly plants are located in three countries. We will continue to optimize and adjust the supply chain. We also need to take a longer time to see that affected by the epidemic and chip shortage, it has been very difficult in the past three years, but on the whole, the adaptability of the company's suppliers has been very good. At present, the supply situation in this quarter is relatively normal.

Credit Suisse analyst Shannon Cross: Luca, I have a question about gross profit margin. The company's outlook is 43.5% Murray 44.5%, which can be said to be very good, so can you tell me what favorable factors will help the company achieve this level of gross profit margin? In addition, what is the company's forecast in terms of exchange rate and adverse factors?

Luca Maastri: yes, we had a good gross margin in the December quarter, and the reported figure was about 43%. December is mainly due to seasonal leverage, and the overall performance of the product portfolio is also very good. Of course, the exchange rate is a problem at present. In the December quarter, the exchange rate (the impact on the company's gross profit margin) is about 110 basis points, while the year-on-year impact is 300 basis points, so the exchange rate situation has changed very much in the past 12 months. In March (fiscal quarter), the profit margin has improved, and our outlook is 43.5% Mur44.5%. With the end of the holiday season, the company has done a lot of work in terms of cost, both in terms of product and service mix, and of course, it is also the previous improvement in cost structure, which has produced an effect. The exchange rate still has a negative impact, with a month-on-month impact of about 50 basis points, but the situation is easing, and the dollar has depreciated in the past few weeks, and it is hoped that the situation will continue to improve in the current fiscal year.

Shannon Cross: Tim, could you please tell me something about the Chinese market? of course you mentioned production earlier. I am more interested in the demand side. What is the impact of the adjustment of Chinese New year and epidemic policy on consumption? What are the main products that consumers buy? What is the company's current market position in China?

Tim Cook: the results for the first quarter show that we (in the Greater China market) are down 7%, but at a fixed exchange rate, we are actually growing. and this was achieved in the context of some of the tight supply chains we mentioned earlier, and epidemic prevention and control across China also affected demand in the first quarter. After the adjustment of the prevention and control policy in December, the traffic volume of Apple retail stores has changed significantly compared with November, as well as on the demand side. I won't talk too much about January, but our performance outlook also takes into account the situation in January. I think the change in January compared to December will be greater than that in December compared to November.

(constantly updating. )

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